Six Unexpected First-Time Home Buyer Costs
Are you ready to purchase your first home in Colorado? Good for you! Homeownership is truly the American Dream. It’s important to know that homebuying costs can quickly add up. You need to be prepared so you can make the move with confidence. Before you take the leap, here are six unexpected costs you need to consider.
1. Earnest Money. When you put an offer on a home, you have to put up “earnest money.” This is a deposit on your home purchase and tells the seller that you are a committed, trustworthy buyer. Earnest money is usually 1-2 percent of the total purchase price.
2. Appraisals and Inspections. Buyers are typically responsible for the appraisal, which ensures an accurate asking price. Budget several hundred dollars for this. Home inspections can prevent unexpected surprises like leaky pipes or foundation issues. Again, budget several hundred dollars for this and be sure to be there for the inspection so you understand any issues.
3. Homeowner’s Insurance. Most lending institutions require you to purchase homeowners insurance and pay for a year’s worth of coverage before a loan is approved. If you don’t put down at least 20% of the purchase price, you may be required to purchase mortgage insurance as well.
4. Escrow Fees and Accounts. The escrow fee is usually split between the buyers and sellers. In addition, most lenders require an escrow account to pay your property taxes and insurance. These monthly costs are rolled into your monthly mortgage payment.
5. Home Improvements, Maintenance and Repairs. It’s important to have additional funds readily available to cover any major repairs that may be required after closing, like HVAC , roof or water heater replacement. If you haven’t had a yard before, you’ll need to have funds for a lawnmower and weed eater, or a lawn maintenance service.
6. Moving Costs. This is often the most overlooked cost of buying a new home. Remember, you have to move your belongings from where you are currently living! Are you and your significant other moving in together for the first time? If so, you’re looking at the cost of TWO moves. It’s important to choose a reputable moving company that has a solid reputation, like Cowboy Moving & Storage in Denver. With more than 2,100 five-star review on ReviewBuzz, Cowboy Moving & Storage is one of the most respected moving companies in the state. Family owned and operated, Cowboy Moving & Storage has been helping Coloradans move since 1968. Whether you’re moving to your first home in Superior, a new apartment in Loveland, a larger home for your family in Aurora or upgrading to a smaller home for retirement in Littleton, Cowboy Moving & Storage is the wise choice in Colorado.